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By encouraging more focused collaboration among multiple functional groups (notably marketing and sales, operations, engineering/R&D, and procurement), these leaders are combining deep insights about customers [particularly in developing markets], competitors, and supply bases to strip out costs and amplify what customers truly value. The results—including better products, happier customers, higher margins, and, ultimately, a stronger ability to innovate—should serve these organizations well in years to come.

In this McKinsey Quarterly article, authors Ananth Narayanan, Asutosh Padhi, and Jim Williams look at three such companies. Their experiences offer insights for any product maker hoping to improve its competitiveness.